Trade Talk

I admire the people who think long-term. I really do. They set their goals, their course, and off they go. Nothing can stop them. But, in my experience, reality has a way of interfering with the best laid plans of men. General Ike Eisenhower said planning may not produce results, but it's still indispensable. General Napoleon Bonaparte said the best plans are destroyed after first contact with the enemy, but they are still necessary. Xie has a plan and I respect that. We have to given him an end goal (a zero-zero trade deal) he knows will be good. Now we have to give him a way to adapt to this new reality we're trying to create, a way which doesn't break his plan.


Today

The deal made between China and Germany indicates the Chinese want trade, but also to stay in the WTO. This might mean they would be willing to adjust WTO rules to make a new kind of deal. But, they don't want to do that immediately or quickly.

Pres. Trump wants a deal quickly or he will make us all suffer.


Next

I suggest that as soon as it is possible we work with the U.K. to make a deal along the zero-zero lines. PM May has already indicated she wants to make deals with many countries around the world, particularly because the financial industry has become a huge part of their economy.


Hopeful Consequences

Announcing that such a deal will be done or (once it has begun) that it is in the works would help to undermine Labour leader Corbyn and that might push the new Mexican leader (who is a friend of Corbyn) to allow a NAFTA deal along those lines. Given his political position an improvement in trade could be a useful achievement.

That done we could immediately turn to other individual nations or small trading blocs and they would have little choice, but to go along. In particular, the new TPP nations would be a thorn in China's side.

At the end of the day China (the reluctant) and Russia (the self-made outcast) would stand alone (or nearly so) and left to sip their beers and wonder where they went wrong with their long-term plan to take over the trade world.


To Woo China

We will welcome them to join this movement at any time and either whole or piece-meal. We would not seek to punish them except that the trade war with them might continue in some fashion and push many American companies to seek out other interlocutors, particularly those who have gone to a zero-zero type trade arrangement.

This is moving a mountain one cup-full at a time, though acting in parallel on several trade deals at once, we might move so much that it won't take long. The tipping point might be arrived at quicker than one would think possible in a sequential world.


The Underlying Story

I suspect China is being faithful to the Shanghai deal they made with Russia (they traded away some flexibility for Russian vodka). Their character won't allow them to walk away from that deal. If we can follow the China-Germany path to make side deals which don't infringe on WTO, then they may move toward zero-zero more quickly. They would prefer to not do that in a very publicized way. In that respect we must help them 'save face'.

I suggest sending Chairman Xie a raw opal, uncut and unpolished -- with the message that it is up to him to do some work to turn that into a better trade relationship with America and the zero-zero trade world. He won't mind a challenge which doesn't require him to do anything immediately or faster than he wants.